Correlation Between Avinger and Precision Optics,

Can any of the company-specific risk be diversified away by investing in both Avinger and Precision Optics, at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Avinger and Precision Optics, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Avinger and Precision Optics,, you can compare the effects of market volatilities on Avinger and Precision Optics, and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Avinger with a short position of Precision Optics,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avinger and Precision Optics,.

Diversification Opportunities for Avinger and Precision Optics,

0.47

Correlation Coefficient

Avinger  Precision Optics,

Very weak diversification

The 3 months correlation between Avinger and Precision is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Avinger and Precision Optics, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precision Optics, and Avinger is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Avinger are associated (or correlated) with Precision Optics,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precision Optics, has no effect on the direction of Avinger i.e., Avinger and Precision Optics, go up and down completely randomly.

Pair Corralation between Avinger and Precision Optics,

Given the investment horizon of 90 days Avinger is expected to generate 1.41 times more return on investment than Precision Optics,. However, Avinger is 1.41 times more volatile than Precision Optics,. It trades about -0.01 of its potential returns per unit of risk. Precision Optics, is currently generating about -0.01 per unit of risk. If you would invest  98.00  in Avinger on August 31, 2024 and sell it today you would lose (15.00) from holding Avinger or give up 15.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Avinger  vs.  Precision Optics,

Avinger

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avinger has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Avinger is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Precision Optics,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Precision Optics, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Precision Optics, is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Avinger and Precision Optics,

The main advantage of trading using opposite Avinger and Precision Optics, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avinger position performs unexpectedly, Precision Optics, can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Precision Optics, will offset losses from the drop in Precision Optics,'s long position.

The idea behind Avinger and Precision Optics, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.